If you paid a micro or small supplier even one day past 45, you may owe a return to the ROC — and the new form wants every transaction with that vendor, not just the unpaid balance.
Due dates: 31 October (for April–September) · 30 April (for October–March).
A company orders custom fabrication from a small, Udyam-registered vendor. Cash is tight that quarter, so the invoice gets paid on day 75. "We paid them, it's settled," the accounts team assumes, and moves on. What they've missed: that single late payment to a micro enterprise pulls the company into MSME Form 1 — and under the current portal, the filing now has to lay out every transaction with that vendor for the half-year, including the ones paid on time.
MSME-1 is quietly one of the most under-filed returns in the calendar, because companies think of it as a "deposits-style" disclosure only big firms worry about. It isn't. Any company that buys from a small supplier and slips past the 45-day line is in scope.
BOTTOM LINE
- Who: Any company that received goods/services from a Micro or Small enterprise (not Medium) and let a payment run beyond 45 days from acceptance.
- By when: Twice a year — 31 October (Apr–Sep half) and 30 April (Oct–Mar half).
- Miss it: Section 405(4) penalty — ₹20,000 on the company and every officer in default, plus ₹1,000/day for continuing default, capped at ₹3 lakh.
What is MSME-1, and why does it exist?
Governs this section: Section 405, Companies Act, 2013; Specified Companies Order, 22 January 2019
MSME-1 is a half-yearly return through which "specified companies" tell the ROC about payments to Micro and Small Enterprise suppliers that ran past 45 days. The MCA introduced it in 2019 after data showed thousands of crores in MSME payments stuck beyond the legal credit period — the return creates regulatory visibility (and pressure) on buyers who delay.
It is a disclosure of behaviour, not of an outstanding balance alone. That distinction is the whole game, and it's where most companies get the filing wrong.
Who actually has to file?
Governs this section: Specified Companies Order, 2019; Section 9, MSMED Act, 2006
A "specified company" is simply any company that (a) bought goods or services from a Micro or Small enterprise, and (b) let the payment cross 45 days from acceptance. Two things people miss:
- Medium enterprises are out. The form covers only Micro and Small suppliers. A delayed payment to a Medium enterprise doesn't trigger it.
- The supplier's status matters, not yours. It doesn't matter whether you are registered under the MSMED Act. What matters is whether your supplier is a Udyam-registered Micro or Small enterprise.
So the practical first step is knowing which of your vendors are Micro/Small — usually by collecting their Udyam Registration number or a written declaration.
Where does "45 days" come from?
Governs this section: Section 15, MSMED Act, 2006
The 45-day line is set by the MSMED Act, not the Companies Act:
- With a written agreement: pay within the agreed period, which cannot exceed 45 days from acceptance.
- Without a written agreement: pay within 15 days.
- "Deemed acceptance" kicks in if you don't object in writing within 15 days of delivery — the clock can start earlier than you think.
PRACTITIONER'S NOTE
The same 45-day line has a second sting under tax law. Section 43B(h) of the Income-tax Act disallows the deduction for any sum owed to a Micro/Small supplier that isn't paid within the MSMED time limit — so a late payment can cost you the expense deduction and a ROC filing. Two regulators, one root behaviour.
The V3 trap: one breach pulls in the whole vendor
Governs this section: revised MSME Form 1 on MCA V3
Under the old V2 form, you reported only amounts still outstanding beyond 45 days at the end of the half-year. Pay everyone off before 30 September and you filed nothing.
The V3 form changed that. Now, if even one payment to a Micro/Small vendor crossed 45 days during the half-year — even if you've since paid it — the filing is triggered, and you must disclose all transactions with that vendor in the period: amounts paid within 45 days, amounts paid after 45 days, and anything still outstanding. Companies running on old V2 logic systematically under-report and are now being adjudicated for it.
When is it due, and is a NIL return needed?
Governs this section: paragraph 3, Specified Companies Order, 2019
Two filings a year, each covering a half-year:
| Half-year | Period | Due date |
|---|---|---|
| First half | 1 April – 30 September | 31 October |
| Second half | 1 October – 31 March | 30 April |
DEADLINE — for FY 2025-26
The Oct 2025–Mar 2026 return was due 30 April 2026. The next one, for April–September 2026, is due 31 October 2026. Build the vendor review into your half-year close so it isn't a last-week scramble.
On NIL returns: if no payment to any Micro/Small supplier breached 45 days during the half-year, a NIL return is not required. But that's a conclusion you should reach deliberately, after a vendor review — not a default assumption.
What does it cost to miss it?
Governs this section: Section 405(4)
PENALTY — Section 405(4)
Non-filing, or filing incorrect/incomplete information, makes the company and every officer in default liable to ₹20,000, plus ₹1,000 for every day the default continues, subject to a maximum of ₹3 lakh. ROCs are actively adjudicating these now that V3 gives them better data.
And note — MSME-1 cannot be revised once submitted. Get the vendor classification and the transaction list right before you file.
Worked example
Mini-case — one late payment, full disclosure
In the April–September half-year, a company deals with three Udyam-registered Micro/Small vendors:
- Vendor A: ₹4,00,000, paid on day 38. On time.
- Vendor B: ₹2,50,000, paid on day 72. Late.
- Vendor C: ₹1,20,000, still unpaid at 30 September (day 50). Late.
Because Vendors B and C breached 45 days, MSME-1 is triggered. Under V3, the return must report Vendor B's full transaction history for the half-year and Vendor C's outstanding dues — and, because Vendor A's payments fall within the same return's vendor scope where applicable, the company discloses the complete picture rather than just the unpaid ₹1.2 lakh. Filing only Vendor C's balance — the instinct from V2 days — would be an incomplete return exposed to the Section 405(4) penalty.
Common mistakes
- "We paid them, so there's nothing to file." Wrong since V3. A payment made late during the half-year triggers the return even if the balance is now zero.
- Counting Medium enterprises. Only Micro and Small suppliers are in scope.
- Not knowing which vendors are MSEs. Without Udyam numbers/declarations on file, you can't even tell if the form applies. Collect them.
- Reporting only the outstanding balance. The V3 form wants the full vendor history once a breach occurs.
- Assuming you can fix it later. MSME-1 can't be revised after submission.
Checklist
- At each half-year close, list every vendor that is a Micro or Small (Udyam-registered) enterprise.
- For each, check whether any payment in the half-year crossed 45 days from acceptance.
- If even one did, pull that vendor's full transaction set for the period.
- Capture the reason for delay for each late payment (the form asks).
- File MSME-1 by 31 October / 30 April; keep the SRN.
- Where no payment breached 45 days, document that conclusion (NIL filing not required).
FAQ
Do I file MSME-1 for delayed payments to a Medium enterprise? No. Only Micro and Small enterprise suppliers are covered.
Is a NIL MSME-1 required if nothing was late? No — if no payment to a Micro/Small supplier exceeded 45 days during the half-year, you don't file. Reach that conclusion after a vendor review, not by assumption.
How do I know if my supplier is a Micro/Small enterprise? Ask for their Udyam Registration number, or a signed declaration of their MSME status. Keep it on file.
Does it matter that we are not registered under the MSMED Act? No. What matters is the supplier's status, not the buyer's.
Can I revise MSME-1 after filing? No. It can't be revised once submitted, so accuracy on the vendor list and amounts is essential.
Primary sources
- Section 405, Companies Act, 2013 & Section 405(4) — penalty
- Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019 (22 January 2019)
- Section 15, MSMED Act, 2006 — the 45-day rule
- Section 43B(h), Income-tax Act — deduction disallowance (cross-reference)
Disclaimer: This article is general information on a fast-changing area of company law, current at the time of writing. It is not legal or professional advice for any specific company. Verify the position against the live MCA rules and consult your company secretary or auditor before filing.